What is a Recession? Precious Metal Investment – Pt.2LCR Coin
Falling House Prices and Falling House Sales In the last major recession – beginning in the US in 2007 and rippling out globally into 2009 – perhaps the most important factor in what causes it was the bursting of the housing bubble in the US. The push to lend more and more people money for mortgages they couldn’t afford to pay back in the early years of the 21st century meant that people were buying homes just to sell for profit later on, or buying when they could not afford it thanks to banks offering interest-only loans. When housing prices began to fall, so did the potential profit – so people struggled to sell, so foreclosures increased. Banks became wary of lending even to each other, and the panic among major banking institutions created the perfect storm. When the first of the large banks began to fold, it triggered the domino-effect of what became known as the Great Recession. In promoting precious metal investment, LCR Coin uses this as a key example as to why it makes sense to have physical assets – the actions of others causing a crash takes any control out of your hands.